Requirement for persons who hold frozen funds to inform OFSI

HM Treasury’s Office of Financial Sanctions Implementation (OFSI) has issued its annual call for Frozen Assets Reporting. All persons and businesses (including but not limited to financial institutions) are required to inform OFSI of any funds or economic resources which they hold or control, which are subject to an EU asset freeze (ie which are owned, held or controlled directly or indirectly by an EU designated person). The deadline for providing this information to OFSI is 13 October 2017. OFSI’s notice can be found here. 

Persons and businesses can find themselves holding frozen funds or assets in all kinds of circumstances, including due to changes that have occurred since you had control of the funds or assets in question. For example, a bank’s client may have been designated by the EU after making its investment or opening its account; a custodian may hold shares which are ultimately owned by a designated person; a business, for whom you hold goods or funds may have been acquired by a designated entity. If you cannot say with sufficient confidence whether any funds or assets that you hold or control many be subject to an EU asset freeze, now is the time to improve your systems and controls, including check the names of all those on behalf of whom you hold assets or funds against the EU list of designated persons. 

This requirement is separate from the expanded OFSI requirement to report suspicions of sanctions breaches, on which we reported in July. 

Dechert can help firms to develop appropriate sanctions compliance policies and procedures, and to advise in cases where the application of the reporting requirement is not clear including as to whether assets or funds properly qualify as frozen, and whether you could be said to hold or control such assets or funds.